hello how can a developer force someone to complete can they do this codigo civil 1.504 and is this somthing that happens, because if people pull out why is this code not enforced, or are the developer happey to take all the deposite thanks sky
Of course. Developers can force you to complete on a property which has attained a Licence of First Occupation (aka LFO) (fully legal) as per Art. 1504 of the Spanish Civil Code. This is known as "Forced Completion". They will compell you to complete before a Spanish Notary Public on a certain day and time by means of recorded delivery (i.e. "burofax") to the address you provided in the Private Purchase Contract (PPC), normally your appointed conveyance lawyer's office.
Forced completion is also covered in my article on avoiding off-the-plan pitfalls (specifically read point five):
Buying Property In Spain Tips Part II. Off-Plan Property - 18th April 2010
Failure to do so will result in them not only withholding the deposits as laid out in the PPC but more importantly also they will now be free to take legal action against you for breach of contract as you failed to complete.
It's up to them to decide on whether it's worthwhile or not to pursue legal action against you even in your home country as its a fairly protracted and drawn-out process. Some do, some don't. But they certainly can if they want to. My recommendation is you seek legalk advice from a UK solicitor on the details of sucha procedure and -legal- ways to counter it.
It is something that quite definitely does happen.
Please read real life's example of developer's threat to complete:
Even developer's under Judicial Admnistration can force you to complete once the LFO is attained. The fact they are under an Insolvency procedure does not stop them legally from being able to compel you to complete ex Art's 1124 and 1504 of the SCC.
Developers on attaining a Spanish ruling which is final (meaning it cannot be appealed in Spain) can execute it against your UK assets following EU Directive 44/2001 which is applicable to all EU members, and that includes of course the UK and the ROI. In fact as it's a two-way street our law firm has set-up a legal service whereby we act on behalf of UK creditors wishing to seize debtor's assets located in Spain:
Recognition and Enforcement of Foreign Court Rulings
Examples of legal queries we've received over the years on the matter of forced completion:
Can our builder sue us and force us to complete after keeping our deposit?
chased to complete
Can a Spanish Developer force us to sell our house in the UK?
What remedies does a developer have to enforce completion
Will i lose my uk home
If we fail to pay our stage payments, can a developer sue us in England?
Raymundo Larraín Nesbitt
Last edited by Lawbird Lawyer; 06-04-2010 at 05:17 PM.
thank you for your reply as I can not pay the balance due to slow down in my work is it best for me to cancel the contract and ask for half the deposit back by offical letter by notary or is is it best for me to wait for forced completion by the developer as Iwill be paying more money to terminate the contract regards sky
Judging from your last post Sky I believe you have not understood my reply.
Originally Posted by Unregistered
If you wait for the developer to notify you formally he will then be able -additionally- to sue you and demand that you complete on the property as per the PPC. In which case he will probably withhold the full deposit, not only the 50% as per your PPC from what you write. To opt out and recover at least the 50% of your deposits you have to do it before he notifies you formally. That is why the granting of a LFO is also so important for this very matter.
Cancelling a contract requires you appoint a lawyer, this is not something you can do on your own.
Last edited by Lawbird Lawyer; 12-02-2008 at 03:38 PM.
No Bank Guarantee
At the initial meeting with our lawyer when we paid our deposit for a 'flipped' property our lawyer repeatedly told us that our money was safe. He smiled indulgently at my repeated questions regarding the security of our funds and kept telling us there was nothing to worry about and in any case the Bank Guarantee would ensure our money was safe. He explained how the Bank Guarantee worked and even offered scenarios in which we might have to claim if anything should go wrong. They also asked us ti give them power of attorney for the purchase of the property as this would mean we would not have to travel back and forth from Spain to sign the contract etc.,
Tired of waiting almost four years for completion and after repeatedly asking our lawyer to seek the return of our deposit under the terms of the 'Bank Guarantee', (to which their repeated reply was that it would involve a very expensive court case because the bank said, ' Only when a judge says we must pay back the money will we return it to the purchasers') we decided to change lawyers.
When we received our file from them there was no Bank Guarantee. I asked them if they had misplaced it and their reply was, 'The developer failed to do his duty and supply one'.
1.Should I sue the lawyers for gross negligence??
2. What do you think would be the outcome?
3. What would be the approximate cost.
4. Where would I find another lawyer with the ability to do this?
5. Would I get back my deposits and also the money that I paid the lawyer for a) Power of attorney ,b) conveyancing services, plus interest and damages?
No Bank Guarantee.........Again!!
I guess you don't have the answers and cannot help me.
Or perhaps you do not have the stomach to sue a fellow lawyer. Whatever the reason....Thanks.
Originally Posted by Unregistered
Further to your queries,
1. You may sue the lawyer if you wish alleging professional negligence and claiming on his professional indemnity insurance.
2. We just wouldn't know as it depends on the judge to rule on this matter. However, Law 57/68 stipulates penalties for the developer that fails to comply with this not for the lawyer as not everyone will hire a lawyer to do the conveyance.
3. It depends on many factors, we are unable to give you a general answer. In any case your lawyer should always provide you a Letter of Engagement with a full breakdown of legal fees and expenses as we do. If you don't agree to it, you don't sign it.
4. Propose your case to any lawyer. They must be proficient in litigation however.
5. The outcome will vary. In any case if you claim form thier professional indemnity insurance you could recover the deposits plus compensation and interests depending on the judge's ruling. I doubt you would be able to recover the POA and their professional fees.
Last edited by Lawbird Lawyer; 12-01-2008 at 02:01 PM.
Patience is a virtue.
Originally Posted by Unregistered
No Bank Guarantee and No Bank Guarantee.........Again!!
Thank you very much for your comprehensive answer.
I now see why the lawyer did not trouble himself to persue the developer for my Bank Guarantee.
He arrogantly regarded providing it as the developer's duty and knew that if anything went wrong with the transaction the blame could be pointed solely at the developer.
He was doing the minimum work for his fee, and he was protecting his own interests first...not mine.
So why did I pay him for PoA? He was paid to act on my behalf and protect my interests.
How does a lawyer aquire the swankiest suite of offices in Marbella when he is so negligent with his clients affairs??
All I wanted was a holiday home in the sun to spend our winters in a warmer climate.
Now, like thousands more,we have lost our money with no chance of being able to afford another property. All our hard work and dreams have come to nothing.
Just one more question. Do you know how many Spanish citizens been caught up in the problems caused with the lack of or failing to produce bank guarantees or is it predominantly affecting foreigners?
Yes, you're right about 'Patience'. But I think that even a saint's patience would be tested when trying to purchase property in Spain.
I fully understand your predicament, however no distinction is made between foreigners and Spanish as you hint, they've both been treated/mistreated alike. I suggest you lodge a complaint as well in the Bar Association of which your lawyer is a member, you will have to file it in Spanish. Many people never get to file these complaints in despite of being aggravated and the matter just drifts by oblivious to the Bar Association.
In fact if you follow the link I provided you in my post above to the article on bank guarantees there's a further link to a newspaper article in which the Bank of Spain itself highlights this problem. I believe there's a petition that is circulating over the net on the matter. Perhaps you should join it.
In any case, even if you don't have a bank guarantee and providing your developer hasn't gone bankrupt you can still pull out due to the late delivery in handing over the property and apply/litigate for a refund on your deposits. Please read this other article of ours.
Suing a developer on grounds that he failed to deliver a BG is a bad idea in our opinion as you are bound to lose. Please read this other article. It makes more sense that your appointed lawyer seeks administrative sanctions imposed on the developer for lack of compliance in issuing BGs following Law 38/99. However, this only allows for a sanction, you will not recover your funds on following this procedure. Developers can be fined up to 25% penalty of the amounts they should have guaranteed:
Building Act: Law 38/99
DISPOSICIÓN ADICIONAL PRIMERA. Percepción de cantidades a cuenta del precio durante la construcción.
La percepción de cantidades anticipadas en la edificación por los promotores o gestores se cubrirá mediante un seguro que indemnice el incumplimiento del contrato en forma análoga a lo dispuesto en la Ley 57/1968, de 27 de julio, sobre percepción de cantidades anticipadas en la construcción y venta de viviendas. Dicha Ley, y sus disposiciones complementarias, se aplicarán en el caso de viviendas con las siguientes modificaciones:
La expresada normativa será de aplicación a la promoción de toda clase de viviendas, incluso a las que se realicen en régimen de comunidad de propietarios o sociedad cooperativa.
La garantía que se establece en la citada Ley 57/1968 se extenderá a las cantidades entregadas en efectivo o mediante cualquier efecto cambiario, cuyo pago se domiciliará en la cuenta especial prevista en la referida Ley.
La devolución garantizada comprenderá las cantidades entregadas más los intereses legales del dinero vigentes hasta el momento en que se haga efectiva la devolución.
Las multas por incumplimiento a que se refiere el párrafo primero del artículo 6 de la citada Ley, se impondrán por las Comunidades Autónomas, en cuantía, por cada infracción, de hasta el 25 % de las cantidades cuya devolución deba ser asegurada o por lo dispuesto en la normativa propia de las Comunidades Autónomas.
I trust the above helps you.
Last edited by Lawbird Lawyer; 12-10-2008 at 06:52 PM.